Magazine article American Banker

Helfer Hints Savings at FDIC Will Lead to Lower Premiums

Magazine article American Banker

Helfer Hints Savings at FDIC Will Lead to Lower Premiums

Article excerpt

Ricki Helfer, celebrating her first anniversary as Federal Deposit Insurance Corp. chairman this week, told bankers Tuesday to get ready for lower premiums.

Savings from cuts in the agency's staff and expenses should allow the FDIC to lower bank insurance costs, Ms. Helfer said in a speech at the American Bankers Association's annual convention here.

"We are reviewing everything we do - as supervisor, insurer, liquidator, and employer - to increase efficiency of the FDIC as an organization and to reduce costs," she said. "For an industry that continues to make record profits, that analytical approach portends well for your premium costs in the future."

For the fourth quarter, the FDIC dropped premium rates to 4.36 cents per $100 of domestic deposits from 23 cents. The agency's board will meet next month to consider how much to charge banks in the first quarter of 1996.

Ms. Helfer said the FDIC had reduced its staff more than a third from a high of 15,600 employees. She said additional cuts were likely but declined to say how much. The FDIC also has slashed expenses by a fifth, combining regulatory relief efforts with reduced employment costs.

"There is more we need to do to reduce staff and expense as the remaining assets of failed banks and thrift institutions are disposed of, and we will do it," she said.

In responding to questions from bankers after her speech, Ms. Helfer contradicted her hints of lower premiums by saying she must build the Bank Insurance Fund above its required 1. …

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